CEOs WOR­RIED ABOUT NEXT YEAR'S ELEC­TION UN­CER­TAIN­TIES

JO­HAN­NES­BURG – Data from the Stan­dard Bank pri­vate sec­tor ac­tiv­ity sur­vey showed ex­port or­ders dropped at the fastest rate in 18 months in Novem­ber, which re­sulted in firms cut­ting in­ven­to­ries to their low­est level since July 2014.

David Owen, an econ­o­mist at IHS Markit, said the lat­est sur­vey data rep­re­sented an­other sub­stan­tive de­te­ri­o­ra­tion in the pri­vate sec­tor econ­omy.

“Firms re­main hope­ful that the econ­omy will pick up in the new year. Al­though, with stock lev­els fall­ing at the fastest rate in over four years, they may find them­selves un­able to ful­fil any up­surge in or­ders,” Owen said.

The SA Rev­enue Ser­vice said last week that the trade deficit widened to R5.5 bil­lion in Oc­to­ber. It was the largest trade gap since Jan­uary, as im­ports rose faster than ex­ports.

Mean­while, the Mer­chantec chief ex­ec­u­tive con­fi­dence in­dex re­leased yes­ter­day showed that busi­ness lead­ers were wor­ried about next year's gen­eral elec­tion, with the in­dex dip­ping four per­cent in the fourth quar­ter to 49 points, just be­low the neu­tral score line of 50 points.

Mer­chantec said the un­cer­tain na­tional elec­tion next year, which is ex­pected to be the most hotly-con­tested since 1994, was on the lips and minds of most chief ex­ec­u­tives.

“Chief ex­ec­u­tives ex­pect that the econ­omy will turn the cor­ner a few months after the elec­tion, pro­vided that Pres­i­dent Ramaphosa gets to serve his first of­fi­cial term in of­fice. There is a belief among chief ex­ec­u­tives that the pres­i­dent is tak­ing bold steps to weed out cor­rup­tion,” Mer­chantec said.

“While this plays out in the po­lit­i­cal arena, chief ex­ec­u­tives have in­di­cated that they are hold­ing back on fur­ther cap­i­tal in­vest­ment and are con­sid­er­ing re­struc­tur­ing their op­er­a­tions to steer their busi­nesses through po­lit­i­cal and eco­nomic un­pre­dictabil­ity.”

The sur­vey fur­ther found that 61.9 per­cent of the chief ex­ec­u­tives ex­pressed a re­newed pos­i­tive sen­ti­ment over Tito Mboweni's ap­point­ment as fi­nance min­is­ter, while 36.7per­cent in­di­cated that they did not be­lieve that the ap­point­ment could pro­vide the eu­pho­ria that South Africa ex­pe­ri­enced when Ramaphosa took the helm.